Factors Influencing the Profitability of EU Banks’ Before and During the Financial Crisis

Öz

Bu çalışmanın amacı, Avrupa bankalarının kredi risklerinin finansal performans üzerindeki etkilerini araştırmaktır. Aktif getiri oranı (ROA) ve özkaynak getiri oranı (ROE) bağımlı değişkenler olup finansal performans göstergeleri olarak kullanılmıştır. Sermaye yeterlilik oranı (CAR), batık krediler (NPL), kredi kayıp karşılığı (LLP) ve borçların krediye oranı (LTD) ise bağımsız değişkenler olarak alınmış olup kredi risklerinin ölçümünde kullanılmıştır. Bu çalışmada, banka kârlılık göstergeleri olan ROA ve ROE her ikisinin de kredi riski ile önemli ölçüde ilişkili olduğu ortaya çıkmıştır. CAR banka performansını pozitif yönde etkilerken NPL ve LLP negatif yönde etkilemektedir. Ayrıca LTD ile banka kârlılığı arasında önemli bir ilişki bulunamamıştır. Kısaca, Avrupa‘daki bankaların kârlılığının yüksek olması daha iyi bir kredi risk yönetiminden geçmektedir. Bunun yanında INF ve GDP ayrıca göz önünde bulundurulmalıdır. GDP negatif bir etkiye sahip iken INF pozitif bir etkiye sahiptir.

 

Anahtar Kelimeler: Kredi Risk, Performansı, Panel Data Regresyonu, EU Bankaları, Kriz Öncesi ve Sonrası.

Factors Influencing the Profitability of EU Banks’ Before and During the Financial Crisis

Öz

This research aims at examining the effect of credit risk on financial performance of the EU banks. Return on Asset (ROA) and Return on Equity (ROE) which are dependent variables were used as financial performance indicators. Capital Adequacy Ratio (CAR), Non-Performing Loan (NPL), Loan Loss Provision (LLP) and Loan to Debt (LTD) which are independent variables were used as credit risk indicators. This study concludes that Return on Asset and Return on Equity both has been found to have significant effect on profitability. Capital Adequacy Ratio positively impacted banks’ financial performance with the exception of Non-Performing Loan and Loan Loss Provision which were found to have a negative impact on the banks’ profitability. Also, Loan to Debt generally was not significant to explain EU banks’ profitability. Shortly, EU banks profitability has been affected positively with better credit risk of these banks. Additionally, credit risk committees should take Inflation and Gross Domestic Product level into account. While Gross Domestic Product level had a negative impact on EU banks’ profitability, Inflation had a positive effect on the EU banks’ profitability.

Keywords: Credit Risk, Performance, Panel Data Regression, EU Banks, Before and During the Crisis.

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